XO Expands International Reach

XO Holdings (news, filings) has turned its attention overseas again, announcing today their intention to expand the company's international services to include IP/MPLS IP-VPN nodes in Europe as well as access throughout Europe, Asia/Pacific, both Americas, and various US territories. XO has been traditionally quite US focused, but this move is another step in a steady plan by XO to increase it's international presence. Back in 2009 XO added capacity on on PC-1 to increase their presence in Japan. Then in 2010, they started up an international customer referral program. This new effort though is obviously a bit bigger, in that it probably involves a partnership with one of the big carrier IP/MPLS networks out there although I don't know which one.

At least, it doesn't seem likely they are actually building out substantial network as part of this effort, given that capex hasn't surged and the company continues to state the need to raise capital in order to follow its expansion plans. Rumors continue to percolate about Icahn's intentions and possible bids for the company, but that is to be expected since Icahn's $0.70 offer remains on the table and unresponded to - at least officially - after four months. The rumors haven't changed lately though.

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16 Comments So Far

Do you believe Level 3 could/would make a bid for XO while in flight with Global Crossing acquisition ? Integration of networks would be fairly seemless as they share same LH fiber and performed metro joint builds in late 90’s. Always seemed to be the logical Level 3 move that never happened and may be preemptive at this point to prevent XO falling into someone else hands.

They could, but I don’t think they would. Or if they would, they would likely be outbid if it were this year – as others would have more to gain and fewer risks to take on. But it is of course possible.

I go with the idea that, Level 3 might make a move for XO. Lately things have been moving in a different direction lately. Networks shaking each other’s hand, and leaving VZ/ILEC out of the last mile. CLEC’s need that 3B rev. to survive. Lawsuits extended for some odd reason. Things have been quite, a little too quite.

As for the international reach it’s detailed inside XO, who the handshake is with. Info was just released concerning it, great move for them.

Can you settle by selling for the right amount? Meaning if a bid between $7.00-$10.00 a share would be approved, based on dropping the lawsuit in exchange. Still trying to figure how much XO is valued, being that,there is no long term debts on their books.

While the company doesn’t technically have LT debt, shareholders of XO are stuck with Carl’s nearly $900 million of preferred and counting. The majority of which converts at $1.50. So there really isn’t just 182 million shares of common there is 630 million. The reason these lawsuits came about was because of the self serving deal (Preferred Shares) Icahn rammed down the throat of XO and its minority share holders.

Icahn either pays fair value for the common he doesn’t already own or he takes his chances in court. These lawsuits won’t go away because another Telco offers a favorable price to buy XO. Minority shareholders would still get screwed and not receive fair value for its shares because of the massive dilluation.

I know last year he was paid $270,000,000.00 give or take for the preferred share he has own. That stop them from giving pay raises to the employees, which is happening again. Meaning Carl gets his money all the time, but the employees are not getting their due. Maybe the lawsuit will change things for the future, and hopefully the court system can reverse the order.

Until then, the ship will keep on sailing, but the direction is still unkown…….

Carl Icahn’s lawsuit seeking at least $100 million from Texas hedge-fund promoter Geoffrey Raynor, his R2 Investments LDC and others was dismissed by a New York state judge.
In the suit, filed in February 2010, Icahn said Raynor interfered with a $2 billion bond offering by Icahn Enterprises LP and other Icahn companies. Justice Eileen Bransten in Manhattan today dismissed the case, which included claims of tortious interference with contract, libel and abuse of process.

It had no chance to begin with. It was just a ridiculous harrassment tactic by Icon’s lawyer. His lawyer has previously been publicly chastised by NY judges for frivilous lawsuits and sloppy work. It always was BS.